With the ever-surfeiting global population, there is a call to create more structures for people to live in and also to do businesses. This has exerted more pressure on the real estate industry because there is a need for more housing and building structures. Furthermore, there is also a need for urban planning to avoid problems associated with unplanned structural development.
The recent surge in population encountered in some areas in the United States has presented insatiable opportunities for the real estate industry as the demand for consumer structures has increased significantly. Among many other areas that have recorded an increase in population, Kissimmee Orlando and Charleston-North Charleston have been on top of the list (U.S. Census Bureau, 2019). The two places are now a hotbed for economic growth and urbanization.
Orlando-Kissimmee-Sanford, Florida has been ranked as the third fastest-growing metropolitan area (U.S. Census Bureau, 2019). Since 2010, the area has recorded a spur in economic growth due to several economic activities that provide sustainable jobs for the people. Kissimmee has seen several construction projects begin, creating a significant amount of cash flow and revenue. Thousands of business people have also aggressively flocked the area lately, providing more job opportunities and availing essential services to the people.
Similarly, Charleston-North Charleston has raised eyebrows lately. In the fourth place on the ranks, the area has recorded a steady increase in population (U.S. Census Bureau, 2019), accounted for by the heavy industrialization in the area. Charleston is a seat for the world’s biggest aviation giant- Boeing and is also the hub for the assembly of the world-class Volvo brand. The area is, therefore, inclined to industrial activity rather than commercial activity. As Charleston is mostly rural, development projects also account for the unexpected increase in population over the years.
Considering the population structure of the two areas highlighted, it is evident that Charleston requires more industrial structures than commercial structures. The area has several assembly lines and warehouses that have lately proven to be insufficient. Locals say that there is a high demand for the warehouses because more businesses are starting and are geared to the industrial side compared to the commercial. In slight contrast, Kissimmee needs more commercial structures to meet the demand of the growing businesses and population. The population growth rate of Kissimmee is relatively larger than that of Charleston.
At a jaw-dropping growth rate of 2.5% (U.S. Census Bureau, 2019), the area calls for more housing, and business space to give more places for the provision of services and goods to the locals. Furthermore, the industrialization at Kissimmee is not as rapid, and therefore there is no great need for several industrial consumer structures. However, since both areas have a high rate of population increase, it is essential to plan for new residential areas.
For Charleston, single-family structures are ideal because the area has a low population density, and there is space to include more of these structures. Considering the income and the preference of the population of the area, it is feasible to create more single-family units in Charleston. The median average income in Charleston is $64,283 annually (U.S. Census Bureau, 2019), which is relatively high, a value that shows most of the residents can afford to rent or buy single-family structures.
Moreover, the area has relatively fewer households, posing a lower demand for housing. Statistics show that there are more house owners than tenants. There has been a significant increase of owners from 64.2% in 2017 to 67.1% in 2018 (U.S. Census Bureau, 2019), showing a great preference for home ownership to renting spaces.
Kissimmee has a larger population size than Charleston. With a staggering 2.57 million people and a population growth rate of 2.5% as mentioned above (U.S. Census Bureau, 2019), it is not enough to say that there is an insatiable demand for housing in the area. As Kissimmee is still developing, it is vital to plan the area well to sustain the ever-increasing population and avoid unnecessary pressure on social amenities and public utilities.
The area has recorded a $58,610 median household income (U.S. Census Bureau, 2019), and therefore most of the population can afford to get a fair single-family structure. It is, however, imprudent to create several single-family structures in such a setting. Seconding that is the fact that there are approximately 877,000 households (U.S. Census Bureau, 2019), meaning that there is a huge demand for family homes.
In such a setting, more apartments and condominiums are needed. 61% of the population are homeowners. This is below the national mean of 63.9% (U.S. Census Bureau, 2019), sending a signal that probably several people are unable to afford homes. To bridge the gap, Gaia Real Estate Inc. should look to create more condos in and around Kissimmee because condos are much more affordable as compared to single-family structures. In addition, the people in the area are not very wealthy, meaning that they have good social relations. More people will purchase the condos mainly because they prefer being social, and they will also not want to care more about managing their environments.
Criteria to be used to select clients in the real estate
It is illogical to build houses that the average person cannot afford if the main aim is penetrating the markets. Therefore Gaia homes should build affordable homes for the people of Kissimmee and Charleston. On the same note, the level of income of the families should be considered while looking for clients for consumer real estate. On average, every family should have a unit that they can at least afford, irrespective of the unit being a condominium or a single-family structure. For the commercial structures, it is pertinent to approach people with steady businesses that can afford to pay rent without fail (Ling, Naranjo &Scheick, 2016). It is a protective measure that will ensure the profitability of the project.
Likewise, it is prudent to approach businesses that have auspicious financial projections to occupy industrial spaces. Moreover, businesses that have large economies of scale will promise better commitment occupancy of the industrial structures. It is mainly because they will have a great need for space, warehouses, and manufacturing/assembly godowns.
Many customers are enticed to purchase products because they like the product or prefer a feature of the product to features of other similar products. Beta testing will come in handy and will give a platform to identify consumer preferences. Some consumers will choose condominiums over single-family structures. This may be because they are social or are trying to cut extra costs that come with maintenance (Silva & Fernando, 2016). Contrastingly, other consumers will prefer single-family structures because they value privacy and want a lawn or a backyard. Targeting customers using the preference approach is effective and will also fully satisfy customer preference.
Type of family/business
When looking for customers for the commercial and industrial real estate structures, it is important to consider the type of business they want to run, are already running, or they will want to set up in the future. Budding business people who are running shops, groceries, gift stores, restaurants, etc., are the best customers for commercial real estate structures. It is because they need less space for their businesses, depending on the size of their stores.
However, wholesalers, drop shippers, and manufacturers need extensive space for enormous machines and storage of goods. Similarly, large families need bigger houses rendering condominiums off the shelf for them. Bachelors, students, newly married couples, or old people will be the best prospects for condominiums because they can live comfortably in small spaces.
Occupation/line of work
This criterion cuts across all types of structures. The occupation of prospective clients will determine the kind of structure they may consider purchasing. For example, a hairdresser or a chef will look to occupying a commercial space simply because they will want to open a salon or an eatery. A law firm will look to open offices in an urban center, whereas, an online marketer will most likely prefer to work from home and will thus look to purchasing a condominium or a single-family structure.
Therefore, if Gaia is selling commercial spaces, the company will approach people with skills and occupations that need physical interaction with their clients. If the company is looking to sell household units, the marketers will focus on technologically oriented people and freelancers. Supposing Gaia is looking for clients to occupy industrial spaces, the marketers will pitch on warehousing companies, transport companies, assembly corporations, and manufacturing firms.
As the population keeps growing in Kissimmee and Charleston, it is important to note that there will be an increase in demand for real estate products. For example, Charleston is rapidly growing as an industrial hub and will need more industrial structures soon as the demand increases. The growth of the industries will stimulate significant demand for labor and consequently a demand for consumer structures. Therefore, there will be a constant need for condominiums and single-family structures (Kettler, 2018).
Kissimmee is also experiencing the same exponential growth as there is more exploration of oil in the area and its environs. There may not be a great need for industrial structures in Kissimmee, but there will always be a need for condominiums and single-family structures. Subsequently, commercial structures will be in demand as long as the population is expected to surfeit over time. The more the household units sell, the more there is a need for commercial structures (Kettler, 2018).
Gaia real estate will explore new markets in Kissimmee and Charleston because the areas are earmarked for more development and urbanization. The population will need new residential, commercial, and industrial areas. Stepping foot in the areas will prove to be effective in providing homes and workplace structures for the population and in turn grow the real estate company.
Kettler, F. F. N. (2018). What goes up… continues to go up: momentum in commercial real estate forecasting price appreciation via cap rates (Doctoral dissertation, Massachusetts Institute of Technology). Retrieved from http://hdl.handle.net/1721.1/120653.
Ling, D. C., Naranjo, A., &Scheick, B. (2016). Credit availability and asset pricing dynamics in illiquid markets: Evidence from commercial real estate markets. Journal of Money, Credit and Banking, 48(7), 1321-1362. Retrieved from https://onlinelibrary.wiley.com/doi/full/10.1111/jmcb.12335.
Silva, M. S. L., & Fernando, W. T. L. (2016, December). Study on Demographic Background of Potential Buyers: With Reference to Luxury Condominium Apartments in Colombo. In University of Sri Jayewardenepura, Sri Lanka, 13th International Conference on Business Management (ICBM).Retrived from https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2909747.
U.S. Census Bureau (2019). Data USA: Orlando-Kissimmee-Sanford, Fl. Retrieved from https://datausa.io/profile/geo/orlando-kissimmee-sanford-fl-metro-area#demographics.
U.S. Census Bureau (2019). Data USA: Charleston-North Charleston, Sc. Retrieved from https://datausa.io/profile/geo/charleston-north-charleston-summerville-sc-metro-area#housing.